On Tuesday finance minister, Bill English said that the government would undertake a major review of government spending and debt levels as part of its response to the Christchurch earthquake. He refused to rule out possible cuts to Kiwisaver, Working for Families payments and interest-free student loans.
However, by Wednesday prime minister John Key told Newstalk ZB that it was unlikely interest will be put on student loans but that increases to EQC levies are inevitable, and that ‘there are aspects of Working for Families worth looking at’.
The Dominion Post’s Vernon Small reports that cuts to Working for Families are likely to be limited to those on high incomes. Mr Small’s highly placed Government source also said there could be further tightening of the eligibility criteria for the student loan scheme and an examination of ways to make it more affordable, though this would not see an end to interest-free loans.
Changes to a planned cut in business tax on April 1 had not been considered.
Mr English said it was early days in the assessment of the cost and extent of the damage and decisions would be made in the run-up to the May 19 Budget once more information was available.
TEU national present Sandra Grey says that the bill to pay for earthquake will be significant and the government will need to make choices.
“It’s important though that those choices don’t hurt people who are already suffering in a tough economic climate. Working for Families plays a crucial role in lifting people out of poverty and allowing them to find work. Interest free student loans helps make the opportunity of tertiary education available for students from all backgrounds.”